Summit Amid Trade Clouds

Prepared by: Lee Hudson Teslik
Updated: August 22, 2007

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Given the free-market leanings of the heads of the United States, Canada, and Mexico, North American summit meetings August 20-21 in Montebello, Quebec, were broadly billed as an opportunity to expand economic links. But the two-day talks were also dogged by new domestic doubts over the North American Free Trade Agreement (NAFTA), especially in the United States, as well as concerns over immigration and border security (WSJ). The meetings opened amid anti-globalization protests (CTV), with activists expressing concerns over environmental matters like climate change and fresh water supplies. Canada’s Prime Minister Stephen Harper announced to U.S. President George W. Bush that Canada will withdraw its 2,500 troops from Afghanistan by February 2009 unless Harper has a parliamentary “endorsement” (Toronto Star) to maintain a troop presence there. In a joint statement concluding the talks, the leaders reported progress on public health initiatives and energy cooperation, among other projects.

Bush entered the meetings with ambitious goals of his own. He praised NAFTA (Bloomberg), pushing for provisions relating to border controls and energy to try to improve the bloc’s competitiveness with respect to China and India. In bilateral talks with Mexican President Felipe Calderon, Bush worked to hammer out the details of a potentially sweeping aid package intended to help Mexico clamp down on its narcotics trade. Besides his Afghanistan statements, Canada’s Harper also focused his attention on asserting his country’s sovereignty over the Northwest Passage, though Canadian news sources said Harper and Bush “agreed to disagree” on the Arctic dispute. Canada and Mexico also broached bilateral concerns, with Harper signaling he hopes to hold private meetings (Globe & Mail) with Calderon to work on a plan that could bring more Mexican workers to Canada.

Despite general agreement among the summit's leaders on the benefits of trade liberalization, the meetings did not produce any significant breakthroughs on trade. Bush, Calderon, and Harper—all of whom face legislatures dominated by opposition parties—have to cope with varying degrees of domestic opposition to trade expansion. Opposition to trade liberalization runs particularly deep in the United States, with congressional Democrats increasingly wary of trade agreements, and specifically NAFTA. This Backgrounder looks at the impact of the Democratic-majority Congress on foreign policy, noting that Democrats have shown “little enthusiasm” for expanding existing trade deals or forming new ones. This attitude became more apparent in 2007 as Congress refused to renew President Bush’s trade promotion authority, effectively halting U.S. efforts to secure a multilateral trade deal through the Doha round of trade negotiations.

With influential labor union leaders eager to roll back NAFTA, North American trade has also emerged as a top issue in the 2008 U.S. presidential elections. In a rebuff to President Bush, every major Democratic candidate has expressed interest in either amending or heavily scrutinizing NAFTA (Bloomberg). A recent Foreign Affairs article notes a shift toward protectionist sentiment in the United States generally, and particularly among Democrats. The New York Times says the issue is emerging as “Democrats’ third rail.” This CFR.org Issue Tracker takes stock of the candidates’ policies toward trade.